Judge declines to toss lawsuit challenging new funding formula for New Orleans schools

Charter school funding formula battle to continue in court

A federal judge refused Wednesday to dismiss a lawsuit against the Orleans Parish School Board and school superintendent over the way funding is allocated among local schools. And the judge’s written order suggested she may be on the fence about how to ultimately rule on the case’s merits.

That means the result of months of discussions among local educators about how to divvy up tax dollars could ultimately be scrapped unless the OPSB and Superintendent Henderson Lewis Jr. prevail after a full hearing.

The lawsuit was filed by two charter schools — Lusher and Lake Forest Elementary — that stand to lose funding under a new formula that shifts more dollars to help pay for students with special needs. As magnet schools with selective admissions standards, Lusher and Lake Forest enroll fewer special-needs pupils than the city’s open-enrollment schools, which pushed for the new formula.

The school board and superintendent wanted the suit dismissed, arguing that federal court was the wrong jurisdiction for a case dealing mainly with state laws.

But U.S. District Judge Jane Triche Milazzo sided with the plaintiffs, who said there is a federal issue involved: whether officials “impaired” the contracts under which Lusher and Lake Forest operate — a violation of the clause in the U.S. Constitution that bars states from passing any law “impairing the obligations of contracts.”

Like most public schools in New Orleans, Lusher and Lake Forest are independent charter schools that operate under contracts with a charter authorizer, in this case the local school board.

While Milazzo has not issued a ruling on whether the board or superintendent actually impaired the schools’ contracts, she did single out what appears to be the crux of the dispute, hinting that she was undecided on how to resolve it.

The question is whether language in the charter contracts explicitly allows officials to alter the way Lusher and Lake Forest are funded through a change in state law.

The schools say their contracts call for funding according to the state’s Minimum Foundation Program, a formula approved each year by the state Board of Elementary and Secondary Education and the Legislature.

The defendants, however, say the contracts also say Lusher and Lake Forest will be funded according to the provisions of the state’s charter school law. And that statute was amended by the Legislature last year to provide for the disputed funding formula in New Orleans.

Milazzo said the difference of interpretation on this point “speaks to the ultimate merits of the issue before this court,” adding that the lines cited by the defendants are “far from unambiguous.”